CBN tightens loopholes in end-to-end electronic payment with new sanctions
Considering rising complaints from Nigerians over incessant electronic payment infractions by both banks and other financial bodies, the Central Bank of Nigeria (CBN) has issued a regulation on the end-to-end electronic payment of salaries, pensions and other remittances, suppliers and revenue collections in Nigeria that will result in penalties if erred.
In a terse circular issued to all banks, other financial institutions and the general public on, ‘Exposure draft for the regulation on end-to-end electronic payment of salaries, pensions and other remittances, suppliers and revenue collections in Nigeria, revised 2018’, the apex bank introduced a penalty of N2.5m on DMBs and Other Financial Institutions on every repeated occurrence of specific infractions and termination of the use of the unapproved end-to-end e-payment solution. The new regulations are laced with sanctions for other forms of infractions.
According to the CBN, “The objective of the end-to-end electronic payment of salaries, pensions, suppliers and taxes initiative was fully aligned with the core objectives of the National Payment Systems Vision 2020, which was to ensure the availability of safe, effective and efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple electronic channels”.
“This would reduce the time and costs of transactions, minimise leakages in revenue receipts and at the same time provide reliable audit trails, thereby making the Nigerian payments system align with international best practices.
CBN also added that “This regulation, therefore, is set out to provide all stakeholders with the operational procedures and regulations that guide end-to-end electronic payment, as defined in section 6.0(i) of this regulation, of all forms of salaries, pensions, suppliers and taxes in Nigeria including levies, social payments, penalties, recovery, bills, honorarium etc”.
While describing the end-to-end electronic payment as, “the seamless electronic processing and payment of all forms of salaries, pensions, suppliers and taxes with the electronic delivery of associated schedules alongside the payment transactions, where applicable on a bank approved electronic platform which transmits the instruction to debit a payer’s account and credit a beneficiary’s bank account,” CBN said the new regulation is to save the economy from issues associated with digital revolution in the financial system.
